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Chen: BlackBerry to focus on high-end keyboard phones

Euan Rocha, REUTERS

Monday, March 31, 2014
5:02:43 EDT PM

A man is silhouetted against a video screen with the Blackberry logo as he pose with a Blackberry Q10 in this photo illustration taken in the central Bosnian town of Zenica, Sept. 21, 2013. REUTERS/Dado Ruvic

TORONTO - BlackBerry Ltd plans to introduce high-end smartphones that cater to keyboard aficionados in the coming 18 months, in an effort to win back core corporate and government clients who have shunned the company's touch-screen devices.

Chief executive John Chen said in an interview that the company's engineers have designed at least three different next-generation handsets that are being "kicked around right now."

"The focus is going to be very keyboard centric," said Chen, the former Sybase CEO who took the reins of the Canadian company just over four months ago.

Chen, viewed by tech industry insiders as a turnaround artist, wants BlackBerry to zero in on its core base of corporate and government clients, and on its services arm, which secures mobile devices on the internal networks of big clients.

He sees that strategy as the best way to reverse market share losses to Apple Inc, Samsung Electronics and other companies that make smartphones powered by Google Inc's Android operating system. BlackBerry reported a fiscal fourth-quarter loss on Friday.

Last month, at the annual Mobile World Congress trade fair in Barcelona, BlackBerry unveiled a new "classic" model with a keyboard that boasts a return of the command keys that include "Menu," "Back," "Send" and "End" buttons, along with a trackpad. The device, dubbed the Q20, will hit store shelves before the end of 2014.

Last year, BlackBerry's product launches emphasized full touch screens. And even the keyboard-equipped devices that it did introduce came without the command keys, alienating some of their die-hard fans.

BBM FOR DESKTOPS

Chen, who has been meeting with BlackBerry clients, said another item that may be on the agenda is bringing the company's popular BlackBerry Messenger service, known as BBM, from mobile devices onto desktop computers.

Such a move, Chen said, would allow employees of big companies and government agencies to go mobile on group chats started on their PCs, without skipping a beat.

"We are certainly going to take a very serious look at putting BBM on the desktop," he said.

Last month, BlackBerry said that it would make BBM available on Microsoft Corp's Windows Phone and the upcoming Nokia X platforms in the coming months. The messaging tool was last year opened up to users of iPhones and Android devices.

BBM, with over 80 million users, was a pioneering mobile-messaging service, but user growth has failed to keep pace with that of WhatsApp and other competitors, in part because BlackBerry had long refused to open the program other platforms.

The potential value of a messaging platform was highlighted by Facebook Inc's acquisition of WhatsApp for $19 billion in stock and cash. The news had helped boost BlackBerry's stock.

In February, BlackBerry outlined its plans to launch BBM Protected for enterprise clients in regulated industries, such as the financial sector.

Chen said BlackBerry is now back on solid financial footing after it sold the vast majority of its real estate portfolio and arranged a convertible debt financing in 2013.

The CEO said he was "very comfortable" with the balance sheet and plans to be cash flow positive or neutral by the end of this fiscal year. Still, any hope of turning a profit is quite a few quarters away.

"It is our plan to return to profitability at some point in fiscal 2016," said Chen. "We need to generate cash and make money on a consistent basis, and it's got to come from our big installed base of enterprise and if we can do that, then we can branch out to do a lot of other stuff."